Sub-capacity FAQs: Ts&Cs Answers

As of July 18, 2011, Sub-capacity terms are now included in the base IBM Passport Advantage agreement. Customers who have accepted the new agreement need only comply with the requirements as stated in Section 3.2. For customers who have not accepted the new agreement, new license acquisitions for sub-capacity deployments require that the customer agree to the Passport Advantage Agreement Attachment for Sub-Capacity Terms prior to such deployment. Existing Passport Advantage customers must submit a modified Passport Advantage Enrollment Form for the Originating Site, and indicate that they wish to have sub-capacity licensing terms.

Since the inception of the Passport Advantage Sub-Capacity offering, IBM has continually made new server virtualization technologies eligible to participate in this flexible option. Refer to the Announcement tab of this FAQ web site for additional history. IBM will continue that strategy, announcing additional eligible virtualization environments through a variety of means. When possible, such announcements will be made through the normal announcement letter process. But given the fast changing virtualized server technology market, in order to be notified when IBM License Metric Tool support for additional eligible virtualization technologies become available, customers will need to subscribe to "My Notifications" (instructions are in a separate FAQ below). They should also monitor the Eligible Virtualization Technology(PDF, 40KB) exhibit for additions.

3

Is IBM working with other hardware and software vendors to extend sub-capacity eligibility and support by ILMT?

Yes, we continue to enhance our sub-capacity offering by making additional virtualization environments eligible, when we can ensure that we have the ability to monitor these environments and articulate the virtualization license counting rules. Since April 2006, both platforms from both Sun and HP are now eligible for sub-capacity and VMware was added in July 2008. IBM worked with Microsoft, Citrix, etc. with the additional x86 server virtualization technologies that were announced as being eligible with the April 7, 2009 announcement. IBM will continue to evaluate additional server virtualization technologies based on customer demand and market presence.

New sub-capacity customers are required to implement IBM License Metric Tool (ILMT), Tivoli Asset Discovery for Distributed (TADd) or IBM Tivoli License Compliance Manager V2.3 with FP05 (ITLCM) within 90 days of their first Eligible Sub-Capacity Product deployment on an Eligible Virtualization Environment. Existing sub-capacity customers should promptly upgrade to new versions, releases or modifications when they are made available per Section 3.2.3b of IPAA. Note that IBM intentionally does not prescribe a specific period of time for this term to accommodate various customer sizes. The intent is for customers to imply as soon as possible given their specific IT framework.

5

What are the exceptions to the requirement to use ILMT for sub-capacity licensing?

There are four exceptions where customers can choose to track their sub-capacity deployments manually using the manual tracking spreadsheet example (under "Essentials") available from Counting Software licenses using specific Virtualization Technologies. The tool is not required when:

IBM License Metric Tool does not support the customer's eligible virtualization technology. (Note that this applies to Eligible Virtualization Technologies which will be listed as such on the Eligible Virtualization Technologies table.) Once support for an eligible virtualization technology becomes available (via Fix Pack, new version, release, or modification), they will be required to install IBM License Metric Tool within 90 days of that availability date. In order to be notified when IBM License Metric Tool support for eligible virtualization technologies become available, they will need to subscribe to "My Notifications". They may also monitor the Eligible Virtualization Technology exhibit for additions on the Sub-Capacity Licensing page available from the Passport Advantage Web.

The customer's worldwide enterprise has fewer than 1,000 employees and contractors, excluding Service Providers, and customers who have contracted with a Service Provider to manage their virtualized server environment. Therefore all Service Providers must use the IBM License Metric Tool. (Service Providers are any entity that provides IT Services for end user customers, either directly or through a reseller.)

The customer's total physical capacity of their servers with sub-capacity licensing within their worldwide enterprise is less than 1,000 PVUs

The customer's servers, with PVU-based products that are eligible for Sub-Capacity licensing, are licensed to the full capacity of the servers.

6

IF ILMT doesn't support my eligible virtualization technology, do I need to track, reconcile and create reports?

If the increase to full capacity is temporary in nature, then ILMT should continue to monitor that server and its partitions. If the increase to full capacity is permanent, ILMT would not be required -- however, IBM would recommend that the server and its partitions continue to be monitored by ILMT, especially if that server leverages an eligible virtualization technology since even "permanent" configurations can be changed, perhaps without the asset manager's knowledge. The reference to manual reporting in the last paragraph of Section 4.a of the sub-cap attachment refers to the customer's overall responsibility to maintain documentation to show compliance with IBM's licensing terms for full capacity (4.a.4) and more specifically for creating sub-capacity reports (4.a.1 thru 3).

8

Is sub-capacity licensing available for both Passport Advantage and Passport Advantage Express customers?

Yes, once they accept the terms of the sub-capacity attachment. Note however, that per those terms, Service Providers (as defined in Z125-7174-02) cannot qualify for the ILMT exception noted in Section 4.a.(2): "if your Enterprise has fewer than 1,000 employees and contractors, you are not a Service Provider, and you have not contracted with a Service Provider to manage your Eligible Virtualization Environment".

11

Why is ILMT's default reporting period set at monthly when the terms allow for quarterly reporting?

The sub-capacity terms reflect quarterly reporting as the maximum amount of time allowed before having to analyze, reconcile, and sign the ILMT reports. Most customers will probably need to perform this effort on a monthly basis, thus the default setting. Some customers, with very dynamic server environments, where partitions are resized/moved frequently and/or with changes in their software inventory, may need to create weekly reports in order to keep up with the volume of change. Only customers with the most stable of virtualized server environments would be able to maintain compliance with IBM licensing terms by doing quarterly reports.

Compared to relatively more stable, full capacity licensed server environments, IBM assumes much more risk in allowing the flexibility of licensing its software on a sub-capacity basis in virtualized server environments, where processor core capacity can be changed on the fly. IBM requires ILMT for the sub-cap offering to help customers maintain their compliance with IBM licensing terms.However, ILMT only provides the data -- the customer must then analyze, reconcile, and create reports that document their on-going compliance. IT Asset Management is a financial discipline and the process of creating these reports is very similar in concept to analyzing, reconciling, and creating financial reports for a customer's accounting ledgers. For example, the initial reports generated by ILMT during the analysis/reconciliation effort could be considered similar to the effort to create a "trial balance".Poor IT Asset Management may result in understated expenses and overstated profits -- a concern for any company's senior management.

13

Can an IBM Business Partner or service provider assist a customer toward achieving license compliance?

Yes, a Business Partner or service provider may be able to assist a customer with license compliance. Many Passport Advantage resellers offer license management as a value-added service. However, the entity that owns the license entitlement (end-user customers in this example) is ultimately responsible for ensuring compliance with sub-capacity terms. In other words, customers may delegate, but they cannot abdicate this responsibility.

How does IBM determine if the customer is in compliance with the sub-capacity terms and conditions?

It is the customer’s responsibility to maintain compliance with sub-capacity terms and conditions. IBM retains the right to audit a customer’s use of IBM software products to verify compliance. Each customer's situation is unique and the audit approach will be adapted to assess compliance specific to those environments.

16

What is the licensing policy if the partition's processor core capacity is temporarily increased due to additional workload?

An increase in the maximum or peak processor core capacity, as measured in PVUs, available to the IBM software requires additional PVU license entitlements. IBM's licensing terms require that customers obtain additional entitlements prior to increasing the processor core capacity available to the software. ILMT monitors for changes in processor core capacity and reports this so that customers can ensure that they have obtained sufficient entitlements to cover these "high water marks". IBM licensing terms do not allow for averaging processor core capacity nor do the terms offer any grace periods for temporary spikes in workload.

17

Does IBM licensing allow for a grace period and / or periodic "true-up" in order to get compliant?

No, IBM licensing terms do not provide for a grace period in order to "true-up". In addition, PVU licensing terms are not based on "usage". Both full and sub-capacity PVU licensing terms requires the maximum (peak) processor core capacity for the server/server cluster (full) or partition (sub-cap) prior to deployment or increase in that capacity. The IBM License Metric Tool monitors the customer's virtualized server environment on a continuous basis and reports back this "high water mark" in PVUs by software product, by partition. This allows he customer to compare the ILMT report output product totals to their inventory of license PoEs to confirm their compliance

18

What does an "increase in an Eligible Sub-Capacity Product's Virtualization Capacity", as referenced in the sub-cap attachment, really mean?

Such an increase occurs whenever you increase the maximum processor core capacity (measured in PVUs) available to the software, when the number of processor cores running the machine or partition is increased beyond PVU entitlements, or when you make the software available to (i.e. install in) another partition on the server.

19

What selection do I make under IBM's My Notifications, in order to be notified when ILMT updates become available?